Archive for category Daily Service

IP Guru Says This Picture Is Worth $1 Billion To Samsung, What About Your Clients’ Family Albums?

Ad Age article by Mark Bergen

Apple-Samsung phone camera wars may have fueled a temporary bubble in the photo licensing arena but the Oscar “selfie” shows that intellectual property can be extremely valuable — and that trusts that hold it need nimble management.

ellen_oscar_selfie_3x2It was the tweet heard around the world, but was it worth $1 billion?

That was the value Publicis Groupe CEO Maurice Levy put on the star-studded Oscar smartphone “selfie” during an interview in Cannes earlier this week. He also immodestly took credit for it, which is a stretch because while Publicis buying arm Starcom Mediavest did broker Samsung’s sponsorship of the Oscars, the tweet itself was spontaneous, according to two sources with knowledge of Samsung’s marketing.

Now, without that $20 million Oscars sponsorship, Ellen DeGeneres would likely have taken the shot with her preferred iPhone, so Mr. Levy can indeed take some credit for setting the stage (the Wall Street Journal reported the agency negotiated with ABC to integrate Galaxy phones into the show).

But was it worth $800 million to $1 billion as claimed? The post so far has nabbed nearly 3.5 million retweets, the most ever. By Twitter’s count, it scored 32.8 million impressions in its first 24 hours. Waves of media coverage followed, yet little of it mentioned Samsung’s connection to the photo.

Run a Google search for “Oscar,” “Ellen” and “selfie,” and nearly 45 million links appear. Include “Samsung,” and the results fall below one million. A similar patterns emerges in news coverage: less than 30% of articles on the event had Samsung in the headline, according to LexisNexis.

“Is there value? Yes. Is it a straight impressions-equals-dollar value? No,” said Matt Wurst, VP at 360i.

“Any attempt to put a media value on that is arbitrary,” said Ian Schafer, CEO of Deep Focus, a digital agency. “Case closed.”

Regardless of the value of the selfie – now enshrined in a painting at Twitter headquarters – it shows just how far the Korean electronics company has come, and rival Apple has fallen. Samsung is telling better stories and just plain out-innovating its arch-rival in Cupertino. Another datapoint: Samsung racked up 453.3 million video views for its ads over the past year, according to Visible Measures. That’s four Super Bowls.

Samsung spends loads more on marketing than Apple on a global basis, which shouldn’t surprise anyone given Samsung sells fridges and TVs around the world. But Samsung has creeped up on Apple in U.S. ad spending as well, increasing $20.1 million to $614 million, compared to Apple’s $627 million in 2013, according to measured media figures (excluding search) from Kantar Media.

Apple, once the standard-bearer for confident storytelling in tech, is scrambling for answers. This week it added four new digital agencies to its roster.

The internal stress became clear earlier this week in emails between Apple VP of marketing Phil Schiller and longtime agency TBWA that surfaced during patent trial between the two companies. Mr. Schiller tore the agency for losing its edge against Samsung in early 2013. “Something drastic has to change,” he wrote. “Fast.”

It was the first visible crack in Apple’s confidence in its products, its marketing, and its market position. And it was written a year before the selfie heard around the world. Imagine what Mr. Schiller is saying now.


Posted by:  Steven Maimes, The Trust Advisor


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Hello Kids–or Goodbye Assets

WSJ Wealth Adviser article by Norb Vonnegut

Weath managers need a formal plan to connect with clients’ childrenboomerkids (1)

Do you have a master plan for keeping your clients’ coming-of-age children as…well, as clients?

I didn’t really have one. That was a mistake.

The average adviser is around 50 years old, and the average client is a few years older. That means the children of our clients are reaching an age when they make independent financial decisions. What happens if they don’t feel much of an affinity with you?

Hello, next gen. Goodbye, assets.

“The attrition is about 90%,” says G. Ryan Ansin, president of the Family Office Association in Greenwich, Conn. FOA is a membership organization that delivers thought leadership to wealthy families around the world.

Baby boomers are passing down $15 trillion in total assets, Mr. Ansin notes. “If you don’t have a relationship with your clients’ kids, you’re going to lose. They’re going to Harvard, Yale and Stanford. And they’re going to meet the younger version of you.”

If you’re a 30-something adviser, you get it.

As a 50-something adviser, you might think, “Not my problem.” For you it’s a race: You service parents like crazy, and you win by retiring before the next generation can ACAT their trust funds out to the 2.0 version of you.

“Let the next guy wrestle with the defection of next-gen assets,” you’re thinking. “By the time he’s running my business into the ground, I’ll be stretched out on a Caribbean beach with an umbrella hanging out of a fruity rum drink.”

Hang on a sec.

You’re leaving money on the table. Waiting for it to be scooped up by some other adviser. Excuse me, since when has that worked for anyone in wealth management?

If you’re on a team, like so many advisers these days, it’s better to steer assets to a younger partner. Your business will be worth more when you sell it. And when you really are sitting on that beach, lolling away the hours, you’ll be happy in the knowledge that You 2.0 paid for a big chunk of your vacation.

So, here are a few thoughts about connecting with your clients’ children. Things I experienced in my practice. And things Mr. Ansin and I discussed.

Starting with the parents is a no-brainer. You can’t talk to their kids until they give you the OK. The trick is to demonstrate your expertise about the softer side of wealth transfer so parents incorporate you into the family dialogue.

Advise them to lose the kiddie-table mentality. The sooner children understand money, the better. So recommend a “UGMA-tutorial” account. (Stop Googling. You won’t find it. “UGMA-tutorial” is my label for a small account that’s used to teach the next gen about money.)

The amount can be $500 or $5,000. Size doesn’t matter. What’s important is that you have a reason for meeting with the children on a regular basis. The next time you schedule a quarterly review with the parents, why not carve off 30 minutes for the kids to discuss their UGMA?

Parents love the idea. You help them take a proactive step with their kids. As trustees of the UGMA, they retain control. And you have a fighting chance when the younger version of you makes a play for the family assets.

The right age to speak with children about investments is more art than science. I asked Mr. Ansin his thoughts.

He said early high school is a good time to help kids understand how a family created its wealth. What were the risks, the sacrifices? The “entrepreneurial flavor” is more important than understanding how much a family has. Or how much a child will inherit.

In the family-office arena, that can be a whole lot.

“One hundred million, five hundred million,” he says, “the numbers are hard to wrap your mind around.”

One last thing: There are less obvious benefits to a next-gen strategy: What parent doesn’t like an adviser who takes a genuine interest in his or her kids?


Posted by:  Steven Maimes, The Trust Advisor


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Morgan Stanley Profit Soars on Wealth Management, Trading

Reuters news by Lauren Tara LaCapra and Anil D’Silva

The corporate logo of financial firm Morgan Stanley is pictured on a building in San DiegoMorgan Stanley reported a 55 percent jump in first-quarter earnings as higher revenue from its institutional securities business augmented another strong quarter from wealth management, sending shares in the Wall Street bank higher.

The sixth-largest U.S. bank by assets reported net income applicable to the company of $1.45 billion, or 74 cents per share, compared with $936 million, or 48 cents per share, a year earlier.

Morgan Stanley’s shares rose 2.8 percent to $30.74 in pre-market trading on Thursday.

Although volumes were lower across most fixed-income businesses, Morgan Stanley said revenue from fixed-income and commodities sales and trading rose to $1.7 billion, a 13 percent increase from a year earlier.

Chief Financial Officer Ruth Porat attributed this growth to “commodities, credit and mortgage”.

The increase in fixed-income and commodities sales and trading revenue contrasted with declines in the equivalent units of JPMorgan Chase & Co, Citigroup Inc and Bank of America Corp, which reported results this week and last.

Goldman Sachs Group Inc, which has more exposure to fixed-income trading than its peers, reported an 11 percent drop in first-quarter profit, though it beat market estimates.

The fixed-income trading business across Wall Street has been hurt by new capital rules, a reduction in risk-taking by clients and by changes to the way derivatives are traded.

In response, banks have cut fixed-income trading staff and tried to automate more activity. Many analysts expect client trading volumes to rise again eventually, but the profitability of the business over the long term remains in doubt.

Porat told Reuters that Morgan Stanley reduced its fixed-income risk-weighted assets by 5 percent in the first quarter.

The bank had $199 billion of those assets according to Basel 3 capital measurements as of March 31, down from $210 billion in the prior quarter, Porat said in an interview.

Morgan Stanley is working toward a goal of having less than $180 billion of risk-weighted fixed-income assets by 2015 in order to free up capital.


Morgan Stanley’s decision to dive deeper into the wealth-management business has also helped to shield it from the decline in fixed-income trading revenue that has been happening across Wall Street for the past five years.

The bank said its wealth management division’s pre-tax profit margin was 19 percent in the quarter ended March 31, up from 17 percent in the same quarter a year earlier.

Wealth management revenue rose 4 percent to $3.62 billion and the division’s earnings were up 65 percent to $423 million.

A year ago, Morgan Stanley did not yet have full ownership of its wealth-management business, the product of a complicated acquisition of the Smith Barney brokerage from Citigroup after combining part of its own brokerage business with Smith Barney in a joint venture.

Morgan Stanley finished its buyout of the business in July, and therefore no longer has to share earnings with Citigroup. Costs related to the acquisition have also declined.

Also on Thursday, Morgan Stanley reiterated its plan to buy back up to another $1 billion of shares and double its dividend this year.

The bank said debt underwriting revenue rose 18 percent to $485 million, reflecting an increase in loan fees.

Equity underwriting rose 11 percent to $315 million as a slew of companies filed for initial public offerings. Advisory revenue rose 34 percent $336 million compared with a year ago.

Overall, first-quarter net income from continuing operations applicable to the company rose 49 percent to $1.47 billion.


Posted by:  Steven Maimes, The Trust Advisor



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Forbes: The Top 50 Wealth Managers

From Forbes

There’s no denying the rapid growth in the wealth management world, and our annual Top 50 Wealth Managers list is proof the industry continues to boom.

The Top 50 Wealth Managers oversee a combined $224 billion in assets. That’s roughly 15% of the entire RIA market.


listStill Booming: Top RIAs Keep Getting Bigger

There’s no denying the rapid growth in the wealth management world, and our annual Top 50 Wealth Managers list is proof that the industry continues to boom.

The Top 50 Wealth Managers oversee a combined $224 billion in assets. That’s roughly 15% of the entire RIA market.

The continual growth of this segment of the industry is the result of the demand for financial advice, and specifically, the shift to fee-based and fee-only investment advice.

Recent research from Cerulli Associates shows advisors in the RIA space are reaping the benefits of this shift in the industry. Assets in the registered investment advisor (RIA) channel have grown 8.8% annually over the five years ending in 2012. Total RIA assets stand at $1.5 trillion, according to Cerulli. The number of financial advisors in RIA space is also on the rise with an annual growth at a rate of 8%.

All that growth is coming at the expense of Wall Street’s more traditional brokerage firms. Though traditional brokerage firms still control most of the industry’s retail assets, Cerulli expects its market share and its total number of advisors to decline.

That’s not news to most RIAs including Canterbury Consulting which sits at the top of this year’s Top 50 list. The Newport Beach, Calif-based firm says its wealth management business for individuals is growing faster than its institutional business as more clients are choosing to ditch brokerage firms. Find out how Canterbury landed on our list for the first time, and how it plans to continue growing its $13 billion in assets over the next several years.

WE Family Offices is another new firm on this year’s list. The internationally focused firm manages some $2.7 billion in assets for clients who are mostly based out of Latin America. You might recognize some of the executives at the firm; Mel Lagomasino was CEO of GenSpring before her and her partners bought international wealth management firm to form WE Family Offices.

Also highlighted on this year’s list is Reston, VA-based Mason Investment Advisory Services. The $3.9 billion fir

m saw some impressive growth over the last year as assets jumped nearly 70% thanks to investment performance and net new assets flowing into the firm. Check out what helps Mason stand out from the rest of the pack.

The methodology for this year’s list has been adjusted a bit. For instance, we stopped including firms that run a hedge fund or mutual fund. For more on other changes and the reasoning behind them, RIA Database (the firm that helps create the lists for us) founder, Julie Cooling, explains.

Top 50 Wealth Manager Methodology

The registered investment advisor (RIA) world is diverse and ever changing. Over the past five years, RIA Database has worked closely with the staff at FORBES to identify the most relevant “true wealth management” criteria for ranking consideration.

The first couple of years, we focused exclusively on fee-only wealth managers.  As the growth of the hybrid RIA market has dominated new and many of the fastest growing RIA firms, we modified the criteria to include RIAs with a broker/dealer affiliation.

This year, RIA Database again compiled the 2013 Forbes Top Wealth Manager Ranking based on total assets under management as of March 31 (end of year data). RIAs were included if their primary business was wealth management services primarily to high net worth individuals. RIAs were excluded if they own and/or manage a mutual fund, hedge fund or broker/dealer.

In this year’s list, hybrid RIAs (broker/dealer affiliates) were again included, however we removed all firms that manage a mutual fund or a hedge fund even if it was not a dominant part of their RIA business. Broker/dealers, turnkey asset managers (TAMPs), and ETF strategists were also excluded. As always, firms with regulatory, civil or criminal disclosures were excluded from the list.


Posted by:  Steven Maimes, The Trust Advisor




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New Law Makes Tax Preparers Obamacare Advisers

Newsmax article by Courtney Coren

Tax-PlanningTax preparers and accountants now have the job of making sure their clients are educated about Obamacare’s tax implications.

“Many people don’t realize it’s the law, and you have to have insurance,” Iris Burnell, a Jackson Hewitt Tax Service adviser, told The New York Times. “They still think there’s a way to worm out of it.”

Portions of the new healthcare law, including the requirement to buy insurance, for certain employers to provide it, and subsidies to help individuals pay for it, were all written into the tax code.

Two tax-related healthcare provisions that will affect taxpayers when they file next year is the penalty for not having insurance and money owed if they received too much in government subsidies to help pay for their insurance.

Taxpayers who don’t buy insurance will have to pay $95 per adult or 1 percent of the income for the household to the federal government, whichever is more, but not more than $10,150 for individuals or $20,300 for married couples filing jointly. These penalties are expected to increase in future years.

Tax preparation companies such as Jackson Hewitt and H&R Block as well as tax software companies such as Intuit, maker of TurboTax, are offering customers healthcare reviews and calculators to help their clients understand what their potential penalties could be if they don’t purchase health insurance.

“Despite all the attention to the Affordable Care Act, many people — the average Joe on the street — are still confused about the law, the tax credits, the penalties,” Mark Ciaramitaro, vice president for healthcare enrollment services at H&R Block, told the Times.

H&R Block now advertises healthcare services on its website. “The name you trust for all your tax needs now also offers friendly, unbiased help when it comes to choosing health insurance.”

The three tax preparation giants have also teamed up with online health insurance brokers for clients to peruse if they are in need of coverage — Jackson Hewitt is working with GetInsured, H&R Block with GoHealth, and TurboTax with e-Health.


Posted by:  Steven Maimes, The Trust Advisor



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Ruling Near on Fiduciary Duty for Brokers

WSJ article by Daisy Maxey

Some See Clues to a Standard for Brokers’ Investment Advice

The debate over a new level of protection for investors in their dealings with brokers may finally be nearing a resolution. And some investor advocates worry about the direction it seems to be taking.

The debate centers on whether brokers should be required to act in the best interest of their clients when giving personalized investment advice, including recommendations about securities, to retail investors.

The “best interest” standard is known as a fiduciary duty. Financial advisers registered with the Securities and Exchange Commission already are held to this standard. But brokers for the most part are held to a different standard, of “suitability,” which requires them to reasonably believe that any investment recommendation they give is suitable for an investor’s objectives, means and age.

The Dodd-Frank Act, signed into law in 2010, directed the SEC to study the matter, and permits the regulator to establish a fiduciary standard for brokers. In late February, SEC Chairman Mary Jo White said the commission would make a decision by year-end.

Meanwhile, the Labor Department is working on a separate proposal that could establish a fiduciary standard for brokers who give advice on retirement investing. It hopes to offer a proposal by August.

Dangerous Confusion?

adviAdvocates of a fiduciary standard for brokers argue that investors don’t understand the current rules. That leaves the door open to abuses by brokers intent on selling products that pay them a commission, whether those investments are the best option for the buyer or not, these advocates say.

“Those dealing with a broker are under the misconception that they’re dealing with a financial professional legally obligated to put their best interests first; that’s not the reality,” says Barbara Roper, the director of investor protection at the Consumer Federation of America.

The problem with the suitability standard is that “you can satisfy a suitable recommendation by recommending the worst of what’s suitable,” she says. “If a variable annuity is suitable, you can recommend a variable annuity offered by a shaky insurer with sky-high fees and poor investment choices.”

But applying the fiduciary standard to broker-dealers as it is now applied to investment advisers would add to brokers’ compliance and liability costs, with no certainty of additional protection for investors, says Gary Sanders, vice president of securities and state government relations for the National Association of Insurance and Financial Advisors in Falls Church, Va.

In fact, he says, such a universal fiduciary standard could end up hurting many investors. Lower- and middle-income investors often turn to brokers who are compensated through product commissions, he says, because such clients are less attractive to financial advisers who are compensated based on a percentage of assets under management. Higher costs could prompt some brokers to drop commission-based accounts in favor of more-lucrative accounts that charge a percentage of assets under management, leaving many lower- and middle-income investors without anyone to turn to for investment advice, Mr. Sanders says.

Critics also say a universal fiduciary standard would narrow the range of products brokers could offer, by limiting their ability to recommend investments that earn them a commission.

Plea for Flexibility

At the least, some in the brokerage industry say, any fiduciary standard for brokers should be more flexible than the one investment advisers now operate under.

“The SEC needs to be sensitive that not every relationship is the same and they need to preserve customer choice” by not constricting the range of products brokers can offer, as a standard like the one that now applies to registered investment advisers would, says Ira Hammerman, executive vice president and general counsel of the Securities Industry and Financial Markets Association, the major lobbying group for large broker-dealers.

He says he is also concerned that the Labor Department will act to treat brokers as fiduciaries when they give retirement advice. He says that could jeopardize the sale of commission-based products as retirement investments while permitting fee-based advising. “It becomes very expensive for rank-and-file retail investors,” he says.

But Tim Hauser, deputy assistant secretary for the Labor Department’s Employee Benefits Security Administration, says the department is working on a package of exemptions that would permit advisers to receive many of the forms of compensation they now receive, while also offering protections to make sure conflicts of interest don’t bias the advice they offer.

Some fiduciary-standard advocates are worried that regulators are heading for a middle ground that these advocates fear will fall far short of what’s needed. Those concerns were fueled in March of last year when the SEC issued a public request for data and analysis on the issue. The request set out assumptions and parameters for comment, including the assumption that a fiduciary duty would permit a broker-dealer to continue to receive commissions and compensation for principal trades. Another assumption: The offering of only proprietary products or a limited range of products wouldn’t in and of itself be considered a violation of the fiduciary standard.

The request also said a broker-dealer at least would need “to disclose material conflicts of interest, if any, presented by its compensation structure.”

Not Happy

The SEC said those assumptions and parameters don’t suggest the ultimate direction of any proposed action. Yet critics worry that a fiduciary duty following those parameters wouldn’t offer adequate protection for investors. And some say it would be more confusing for investors than existing standards.

“The concern is that the argument of the [brokerage] industry has been generally accepted,” says Knut Rostad, president of the Institute for the Fiduciary Standard. “If that’s the case, then to proceed, we will have the worst of all possible worlds. We will have a situation where every single broker and adviser will be able to say they’re a fiduciary, when the rule making would essentially be a commercial sales standard with a little bit of extra disclosure requirements.”

Ms. Roper of the Consumer Federation of America says, “If this is what an SEC rule would look like, it would weaken protection for investors and they should not move forward.”

SEC Commissioner Daniel Gallagher fueled worries when he said in March that the commission is concerned that new rules could have the unintended consequence of limiting investor choice, because broker-dealers could scale back full-service brokerage accounts for retail investors. But he also said the topic was “very much an open issue.”

“I haven’t given up hope,” says Ms. Roper.


Posted by:  Steven Maimes, The Trust Advisor



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Nuveen To Be Bought by TIAA-CREF in $6.25 Billion Deal

Chicago Tribune article by Becky Yerak

nuvMadison Dearborn bought Nuveen, then publicly traded, in 2007 at the height of the buyout boom for $5.8 billion.

TIAA-CREF plans to buy Chicago-based Nuveen Investments for $6.25 billion, a deal that gives local private equity firm Madison Dearborn Partners the chance to at least break even on a transaction it made in 2007 at the height of the buyout boom.

Nuveen, which has $221 billion in assets under management, is owned by an investor group led by Chicago-based Madison Dearborn.

Nuveen will operate as a separate subsidiary within TIAA-CREF’s asset management business. TIAA-CREF provides such retirement and financial services as mutual funds.

John Amboian will remain the chief executive officer of Nuveen, and Nuveen’s current leadership and key investment team will stay in place.

The addition of Nuveen brings TIAA-CREF’s total assets under management to about $800 billion. The deal, which includes debt, is expected to be complete by the end of 2014.

Madison Dearborn bought Nuveen, then publicly traded, in 2007 at the height of the buyout boom for $5.8 billion. Private equity firms typically hold their investments for a period of years and then sell them.

Nuveen distributes its investment products and services to retail and institutional investors primarily through intermediaries, including national and regional broker-dealers, independent broker-dealers and commercial banks and trust companies. It has long-standing relationships with such companies as Bank of America Merrill Lynch, Morgan Stanley Smith Barney, UBS and Wells Fargo. Nuveen was founded in 1898.

Its 2013 revenues were $1.08 billion, down from $1.1 billion in 2012, though up from $678 million in 2009, according to a recent filing. It made $45.2 million in 2013, compared with a $571 million loss in 2012.

That year had marked its third straight year of losses. Other private-equity investors that participated in the 2007 transaction included Merrill Lynch Global Private Equity, Wachovia Capital Partners, Citi, DB Investment Partners and Credit Suisse/DLJ Merchant Banking.


Posted by:  Steven Maimes, The Trust Advisor


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Chances of Getting Audited by IRS Lowest in Years

Associated Press article by Stephen Ohlemacher

irs-audit-As millions of Americans race to meet Tuesday’s tax deadline, their chances of getting audited are lower than they have been in years.

Budget cuts and new responsibilities are straining the Internal Revenue Service’s ability to police tax returns. This year, the IRS will have fewer agents auditing returns than at any time since at least the 1980s.

Taxpayer services are suffering, too, with millions of phone calls to the IRS going unanswered.

“We keep going after the people who look like the worst of the bad guys,” IRS Commissioner John Koskinen said in an interview. “But there are going to be some people that we should catch, either in terms of collecting the revenue from them or prosecuting them, that we’re not going to catch.”

Better technology is helping to offset some budget cuts.

If you report making $40,000 in wages and your employer tells the IRS you made $50,000, the agency’s computers probably will catch that. The same is true for investment income and many common deductions that are reported to the IRS by financial institutions.

But if you operate a business that deals in cash, with income or expenses that are not independently reported to the IRS, your chances of getting caught are lower than they have been in years.

Last year, the IRS audited less than 1 percent of all returns from individuals, the lowest rate since 2005. This year, Koskinen said, “The numbers will go down.”

Koskinen was confirmed as IRS commissioner in December. He took over an agency under siege on several fronts.

Last year, the IRS acknowledged agents improperly singled out conservative groups for extra scrutiny when they applied for tax-exempt status from 2010 to 2012. The revelation has led to five ongoing investigations, including three by congressional committees, and outraged lawmakers who control the agency’s budget.

The IRS also is implementing large parts of President Barack Obama’s health law, including enforcing the mandate that most people get health insurance. Republicans in Congress abhor the law, putting another bull’s-eye on the agency’s back.

The animosity is reflected in the IRS budget, which has declined from $12.1 billion in 2010 to $11.3 billion in the current budget year.

 Obama has proposed a 10 percent increase for next year; Republicans are balking.

Rep. Ander Crenshaw, R-Fla., chairman of the House subcommittee that oversees the IRS budget, called the request “both meaningless and pointless” because it exceeds spending caps already set by Congress.

Koskinen said he suspects some people think that if they cut funds to the IRS, the agency won’t be able to implement the health law. They’re wrong, he said.

The IRS is legally obligated to enforce the health law, Koskinen said. That means budget savings will have to be found elsewhere.

Koskinen said he can cut spending in three areas: enforcement, taxpayer services and technology. Technology upgrades can only be put off for so long, he said, so enforcement and taxpayer services are suffering.

Last year, only 61 percent of taxpayers calling the IRS for help got it. This year, Koskinen said he expects the numbers to be similar. To help free up operators, callers with complicated tax questions are directed to the agency’s website.

“The problem with complicated questions is they take longer,” Koskinen said.

Your chances of getting audited vary greatly, based on your income. The more you make, the more likely you are to get a letter from the IRS.

Only 0.9 percent of people making less than $200,000 were audited last year. That’s the lowest rate since the IRS began publishing the statistic in 2006.

By contrast, 10.9 percent of people making $1 million or more were audited. That’s the lowest rate since 2010.

Only 0.6 percent of business returns were audited, but the rate varied greatly depending on the size of the business. About 16 percent of corporations with more than $10 million in assets were audited.

Most people don’t have much of an opportunity to cheat on their taxes, said Elizabeth Maresca, a former IRS lawyer who now teaches law at Fordham University.

Your employer probably reports your wages to the IRS, your bank reports interest income, your broker reports investment income and your lender reports the amount of interest you paid on your mortgage.

“Anybody who’s an employee, who gets paid by an employer, has a limited ability to take risks on their tax returns,” Maresca said. “I think people who own their own business or are self-employed have a much greater opportunity (to cheat), and I think the IRS knows that, too.”

One flag for the IRS is when your deductions or expenses don’t match your income, said Joseph Perry, the partner in charge of tax and business services at Marcum LLP, an accounting firm. For example, if you deduct $70,000 in real estate taxes and mortgage interest, but only report $100,000 in income.

“That would at least beg the question, how are you living?” Perry said.

Koskinen said the IRS could scrutinize more returns — and collect billions more in revenue — with more resources. The president’s budget proposal says the IRS would collect an additional $6 for every $1 increase in the agency’s enforcement budget.

Koskinen said he makes that argument all the time, but for some reason, it’s not playing well in Congress.

“I say that and everybody shrugs and goes on about their business,” Koskinen said. “I have not figured out either philosophically or psychologically why nobody seems to care whether we collect the revenue or not.”


Posted by:  Steven Maimes, The Trust Advisor



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Stephen Colbert: Your Sponsor-Skewering, Young-Skewing ‘Late Night’ Host

Ad Age article by Nat Ives

colberCBS has named Comedy Central’s Stephen Colbert to take over for David Letterman as host of “The Late Show” next year when Mr. Letterman retires.

The news caught many people off-guard, coming as quickly as it did after Mr. Letterman’s surprise announcement last week that he was ending his decades-long run as a late-night host. Where NBC had seemed to plan for transitions at “The Tonight Show” like it was a succession to a throne, CBS Corp. CEO Les Moonves had seemed to have been caught unprepared for Mr. Letterman’s departure.

But the speedy word that Mr. Colbert would take over the show suggests that Mr. Moonves had some plans in mind long before Mr. Letterman said he would exit.

“Stephen Colbert is one of the most inventive and respected forces on television,” Mr. Moonves said in a statement. “David Letterman’s legacy and accomplishments are an incredible source of pride for all of us here, and today’s announcement speaks to our commitment of upholding what he established for CBS in late night.”

The hire reunites Mr. Colbert with Mr. Moonves in a way: Mr. Colbert’s “Colbert Report” runs at 11:30 on Comedy Central, part of Viacom, which split from CBS in 2006.

More importantly, it brings CBS an increasingly well-known host — Mr. Colbert starred in Super Bowl commercials for Wonderful Pistachios this year — with strong appeal among younger viewers.

It also delivers “The Late Show” into the hands of a comedian who’s happy to both take sponsorship money and occasionally mock his benefactors. In 2012 Mr. Colbert mercilessly made fun of Wheat Thins, a sponsor, by reading its high-minded brand brief to the audience and viewers. The brief said the crackers are not “a creator of isolated, unsharable experiences,” Mr. Colbert said. They are “a snack for anyone actively seeking experiences” and “a connector of like-minded people.”

Kraft decided to consider the episode a net plus, but some advertisers might not be so calm.


Posted by:  Steven Maimes, The Trust Advisor


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The Private Trust Company Reaches $1 Billion in Personal Trust Assets

Press Release via PR Web

The Private Trust Company, N.A. (“PTC”), a wholly owned indirect subsidiary of LPL Financial Holdings Inc., announced a significant milestone for the company of surpassing $1 billion in personal trust assets, placing it among the financial services industry’s 30 largest banking institutions in the country, based on total fiduciary assets reported to the FFIEC in 2013.

PTC is a nationally chartered trust company that provides administrative trust services for individuals and families and specializes in delegating investment management to financial advisors both inside and outside of LPL Financial’s network of financial advisors. PTC helps financial advisors implement recommended trust strategies and fulfills the succession trust needs of their clients. And, LPL Financial Holdings Inc., through its wholly-owned subsidiary LPL Financial, is a leading independent provider of investment brokerage, advisory and custody services.

Bethany Bryant, President of PTC, cited LPL Financial’s commitment to expanding its capabilities to serve mass affluent, high-net-worth investors, their advisors and institutions as a key driver behind PTC’s success. “Our team at PTC has worked hard to develop a trust business that would be highly scalable,” said Ms. Bryant. “PTC’s significant growth in trust assets over the past 18 months is the result of that work and our complementary relationship with LPL Financial’s fast-growing high-net-worth business, our business partners and advisors.”

Andy Kalbaugh, LPL Financial Managing Director and Head of Institution Services, and Chairman of PTC’s Board of Directors, said, “PTC’s success underscores the tremendous opportunity that LPL Financial has in this market. PTC’s expertise in trust services have enabled LPL Financial to create a consultative platform of wealth management solutions for financial advisors that cater to the needs of high-net-worth investor clients. Moreover, we plan to continue to expand our offering to this audience by leveraging the proven capabilities of our technology. We congratulate our LPL advisors, Bethany Bryant and her team on surpassing the $1 billion milestone.”

Last year, PTC launched a turnkey Trusteed IRA solution, which enables any financial advisor, regardless of whether he or she is affiliated with LPL Financial, to provide clients who have significant IRA holdings with the ability to self-direct how their IRA assets are distributed to beneficiaries.

About The Private Trust Company

The Private Trust Company, N.A. (PTC) provides trust administrative services to approximately $1.1 billion in individual and family assets, and also serves as custodian for $110 billion in IRA assets. Licensed in all 50 states under its national banking charter, PTC serves as corporate trustee, co-trustee, or agent for an individual trustee while specializing in delegating investment management to financial advisors. PTC’s model allows for clients to utilize the experts at PTC to provide professional trust administrative services while outsourcing investment management services. The Private Trust Company is a wholly owned indirect subsidiary of LPL Financial Holdings Inc.


Posted by:  Steven Maimes, The Trust Advisor



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